S&P takes Petrozuata off watch

Standard & Poor's removed Petrozuata Finance Inc. from CreditWatch with negative implications and confirmed its ratings including its $300 million 7.63% bonds series A due 2009, $625 million 8.22% bonds series B due 2016 and $75 million 8.37% bonds series C due 2022 at B. The outlook is stable.

S&P said the removal from CreditWatch is due mainly to the project's ability to restart and stabilize operations and to make offshore debt payments without exposure to foreign exchange controls.

The removal is further supported by the outlook for the Bolivarian Republic of Venezuela and PDVSA, which was revised to stable on April 16 by S&P because of the government's improving liquidity and a reduction, albeit limited, in economic and political pressures.

Continued operation of the upgrader relies on continued operations of PDVSA. PDVSA has improved oil production levels to about 3.1 million barrels per day despite the dismissal of about 40% of its employees in response to a general strike.

However, PDVSA operations, and thus potentially feedstock supplies to Petrozuata, remain exposed to renewed disruptions caused by continuing political and social tensions and uncertain capital available for investment.

The stable outlook reflects Petrozuata's current production above or at pro forma rates and general expectations that the project will continue to receive sufficient feedstocks from PDVSA Gas to support production and will not be subject to foreign exchange controls, S&P said.

S&P puts Sélectibail on developing watch

Standard & Poor's put Sélectibail on CreditWatch developing including its €76.225 million 6.75% bonds due 2003 and €76.225 million 8.5% bonds due 2004 at BB+.

S&P said the action follows the announcement of a planned merger of Sélectibail and its sister property company Bail Investissement.

Sélectibail's financial profile has been eroded by the after-effects of an aggressive external growth strategy carried out in the mid-1990s. The company's current strategy is one of liquidating assets, as reflected by the winding down of its former core real estate leasing business, S&P noted.

In December 2000, the decision to merge Sélectibail's former main subsidiary, Immobilière Complexes Commerciaux, with Bail Investissement had the effect of further reducing Sélectibail's balance sheet. In exchange, Sélectibail received 17.92% of Bail Investissement's shares.

S&P rates Medco Energi notes B+

Standard & Poor's assigned a B+ rating to the $200 million notes to be issued by PT Medco Energi Internasional Tbk through MEI Euro Finance Ltd.

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